U.S. productivity up to 2003 level

Food for economic thought:

U.S. non-farm productivity was stronger than initially thought in the second quarter as companies slashed costs to protect profits, data showed on Wednesday.

The Labor Department said non-farm productivity rose at a 6.6% annual rate, rather than the 6.4% pace it reported last month. That was the biggest increase since the third quarter of 2003.

Productivity rose at a 0.3% pace in the first quarter.

Analysts polled by Reuters had forecast productivity, which measures the hourly output per worker, rising at a 6.4% rate in the second quarter.

Despite the increased productivity, output fell at a 1.5% rate in the second quarter, the department said, unchanged from its previous estimate, as over 6 million jobs have been cut since the recession began in December 2007. Output, measured on a year-on-year basis, was 5.5% lower.